Freestanding ERs and retail clinics: Do they create a more efficient health care system?

I have written about both issues before: freestanding ERs and retail clinics. Two recent studies continue to show how useless they both are in helping create a better more efficient health care system.

The freestanding ER study examined the number of these facilities and population characteristics where they locate. They identified 360 freestanding ERs, mostly in Texas, Ohio, and Colorado. This will come as no surprise; they were located in areas with better payer mixes, higher incomes, and lower Medicaid patients. There were a few small differences between the three states, but nothing major or particularly noteworthy. The retail clinic study examined if retail clinics reduced the number of low acuity visits to ERs. Once again, no surprise, the answer was a resounding no.

As I’ve written about before, I don’t blame the business people, investment bankers, and brokers building these facilities. They see them as profit opportunities, and that’s what business is for: to make a profit. They are merely profiting off of the fact that Medicare pays an ER $1,000 to $2,000 to manage a cough, back pain, a fever, and so on, and a family physician no more than $100. Insurance companies just follow the relative weightings of Medicare. ERs sometimes charge much more if an overnight observation of questionable necessity is ordered. Some of the freestanding ERs have morphed into mini-hospitals equipped to house patients for overnight observation stays. Even for Medicare, the total bill could be several thousand more, and patients are often stuck with even higher bills when they find out that some or all of the people billing them are out of network.

Surely the non-health care industry in America understands why the money flows the way it does. I have much less faith that they understand why. They often blindly trust insurance companies to look after their interests, but I’ve heard none of the corporations or insurance companies call for Medicare to reset the relative weighting of how ER visits are valued vs. family medicine visits. Until they do, America will keep getting what it pays for: narrow-minded fragmented care at an exorbitant price.